Online and mobile payment statistics

Once upon a time,
a brick-and-mortar store was the center of the shopping experience. Now online
shopping has become the norm for many people, and with it, comes new payment
choices and challenges.

Online sales
(excluding mobile) took a dip after the Great Recession, but they have since
picked up. In the third quarter of 2016, retail digital commerce on desktop and
mobile reached $84.3 billion.1

Digital commerce
growth substantially outperformed total consumer discretionary spending in the
third quarter of 2016. Total digital commerce accounted for more than one in
every seven discretionary dollars spent by consumers.In that
quarter, consumers spent an average of $86.30 per transaction, an 11 percent
increase from the same quarter in 2015.1

Online revenue
was up 9.2 percent in the third quarter of 2016 compared to the previous year.
The share of mobile orders (phone and tablet) out of all e-commerce had
increased to 31 percent in November 2016, up from 29 percent in 2015.3

For the fourth
quarter of 2016, $109.3 billion was spent online, marking an 18 percent
increase over the same quarter in 2015.6

The majority of
online buying occurred on desktop computers, with $86.6 billion spent, up 13
percent from the year before. mobile commerce spending (smartphones and
tablets) contributed 22.7 billion, a 45 percent year-over-year growth. Overall,
mobile accounted for 21 percent of total digital commerce dollars in the fourth
quarter of 2016.6

In the fourth
quarter 2016, e-commerce accounted for 8.3 percent of adjusted total retail
sales, a 1.9 percent change from the previous quarter, and a 14.3 percent
increase from the same quarter in 2015.4

The growth of m-commerce
When asked if they would load their card information into a mobile phone or
mobile wallet for the purposes of making a purchases, 44 percent of consumers
said they likely or definitely would load a credit card or that they had
already loaded one. Debit cards were comparable, at 42 percent.7

Interest in Various Mobile Phone Features

2015

2016

Use your phone to immediately stop a transaction that was not made by you

66%

69%

Instantly view transactions made
with your debit or credit cards

60%

62%

Receive instant offers and
promotions for the store you
are visiting

47%

54%

The ability to use your phone to
turn your payment card on or off
based on location

52%

53%

The ability to use your phone to
turn your payment card on or off
based on type of store

50%

50%

The ability to use your phone to
turn your payment card on or
off based on time of day

48%

50%

Keep all your loyalty /
rewards cards on your phone

47%

49%

Transfer money to another
person, such as a family
member or friend

47%

48%

A mobile app that allows you
to capture bills you receive in
the mail

NA

46%

Use a mobile app to change the
PIN on your debit or credit card

39%

41%

Use your phone instead of a
payment card to make
purchases when checking out

39%

40%

A mobile app that will allow
you to split your restaurant
bill with friends

NA

40%

Store your government
issued identification, such
as a driver's license

35%

37%

Use a wearable device, such
as a smart watch, to make a
payment

29%

31%

Source: TSYS

Mobile commerce
spending (m-commerce) has attained a much more meaningful share of total
digital commerce sales, hitting 20 percent for the first time in Q3 2016, a 3.6
percent increase over the same quarter a year before.M-commerce
growth outpaces e-commerce and brick-and-mortar stores when it comes to
discretionary spending.1

According to a
study by Bank of America, 19 percent of Americans turn to their mobile device
to shop, 51 percent use it to book travel, and 24 percent use it to order food.9

Two in five
consumers (40 percent) would use or already use their phone to make purchases
at checkout, up from 35 percent in 2015. Millennials are most likely to do so
(57 percent). When it comes to paying someone back, digital methods (28
percent), including payment and mobile banking apps, are nearing traditional
methods such as cash (57 percent) and check (40 percent).9

Between May 2016
and June 2016, the percentage of all consumers who had made mobile payments
jumped from 30 percent to 74 percent. In-app and online purchases on mobile
phones jumped from 23 percent to 55 percent.8

Types of payments made via mobile in June 2016

Paid a bill

54%

Received loyalty points

29%

Sent/received money

27%

Made in-store purchases

23%

Paid for parking/taxi/other transit

13%

Made payment by text message

4%

Sent money internationally

2%

Source: First Annapolis Consulting/M&A Advisory Services

The average
mobile wallet user loads 1.9 cards into their phone’s wallet.8

The U.S.
transition to EMV has been painful, however, and the forced change may
represent an opportunity for digital wallet providers to increase usage.2

Who is
shopping via mobile?
According to FICO, the Digital
Generation (Gen D) is not an age, but a mindset. It’s made up of all technologically
savvy consumers. Millennials and Gen Xers make up a large portion of this
audience, but not all.2

Among Gen D,
mobile payment usage is fairly low, but significant indications point to
increased use of mobile payment services in 2017. In 2015, only 9 percent of
18- to 24-year-olds were using mobile payments, and only 4 percent of 25- to
34-year-olds.2

The use of mobile payment apps among millennials is low compared
to awareness. While 64 percent of millennial iPhone users have heard of Apple Pay,
only 8 percent use it. Similarly, of the 39 percent of millennials who use a
Samsung phone, only 8 percent use Samsung Pay.One in four
millennials have tried a mobile payment, but stopped doing so. The main reason
for not continuing to use mobile payments was security concerns.5

However, the
numbers are a little more promising when looking at total consumers, rather than just millennials. In June 2016, 89
percent of consumers were aware of Apple Pay, and 42 percent were enrolled in
the payment service.8

Mobile app awareness, use among total consumers June 2016

Apple Pay

Consumers are aware

89%

Enrolled

42%

Have made a purchase

73%

Made purchase once a week or more

24%

Android Pay

Consumers are aware

64%

Enrolled

14%

Have made a purchase

65%

Made purchase once a week or more

22%

Samsung Pay

Consumers are aware

54%

Enrolled

18%

Have made a purchase

71%

Made purchase once a week or more

32%

Source: First Annapolis Consulting/M&A Advisory Services

Credit
cards favored for online purchases When it comes to making online
payments, consumers prefer to use credit. However, PayPal has long been a
strong payment option for those paying online.7

Still, credit
cards far outpaced debit and PayPal when it comes to payment preference when
shopping online and when using online travel sites.7

When it comes to
online purchase safety, 42 percent of consumers feel credit cards are safest,
followed by PayPal at 26 percent and debit cards at 12 percent. Ten percent of
consumers said they didn’t have a preference, and the last 10 percent preferred
a prepaid or gift card when it comes to safety.7

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